Australian Securities & Investments Commission reports Federal Court finding Green County and Max Funding engaged in unlicensed credit activity

The Australian Securities & Investments Commission (ASIC) published an update on a Federal Court decision finding business lender Green County Pty Ltd and business loan introducer Max Funding Pty Ltd engaged in unlicensed credit activity in connection with loans provided by Green County to two consumers. The Court also found Green County contravened consumer protection provisions in the Credit Code. The Court held the firms could not simply rely on a “Business Purpose Declaration” obtained from a consumer and were required to make reasonable inquiries about the purpose of the credit. In one case, reasonable inquiries would have revealed the loan was not for a business purpose, and across both consumers the entities failed to establish that loans presumed to be consumer loans under the Credit Code were instead business loans, resulting in the consumers missing key Code protections. ASIC was unsuccessful in relation to one loan and in its case against Green County director Ivy Tang Gy Ng, with the Court finding she had not breached her directors’ duties. The Court will determine the next steps in the matter.